The clustering of cork firms in Santa Maria da Feira : why history matters

Abstract

This paper studies the reasons why most Portuguese cork manufacturing firms are concentrated in Santa Maria da Feira, a small municipality in the north of the country, whereas the bulk of the cork is produced in the south (Alentejo and Ribatejo). It starts with a brief introductory discussion of the advantages and limitations of clusters and industrial districts, together with an illustration of the recent theoretical findings of evolutionary economic geography. Next, a comparative analysis is made of the economic performance over the last decade of firms located in Santa Maria da Feira and other regions, leading to a powerful conclusion that points to the absence of any clear advantages for clustered firms. Finally, an attempt is made to discover the historical and socio-political reasons why so many cork firms are concentrated in Santa Maria da Feira. These are shown to be indispensable for understanding and substantiating the business location decisions of most Portuguese cork entrepreneurs.